Tax Credits and Hunger Relief: Two Federal Programs – Two Different Outcomes

April 15, 2010 § Leave a comment

David Davenport – President & CEO

Happy Tax Day, Central Texans!

The U.S. Bureau of Labor Statistics reported last month that more than half of all Texas wage and salary workers were paid at hourly rates. Of those hourly employees, 8.5 percent were paid at or below the federal minimum wage — the worst rate in the nation.  Women are more likely to earn at or below the Federal minimum wage than men (10.8 versus 6.4 percent in 2009) .

Employed wage and salary workers paid hourly rates with earnings at or below the prevailing Federal minimum wage in Texas, annual averages, 1998-2009

The Earned Income Tax Credit (EITC) and SNAP (formerly known as the Food Stamp Program) are both federally funded programs designed to help low-income families meet a basic need.  However, issues of stigma and access mean that Texas has very different levels of participation in these means-tested federal programs. How does our state respond?

Participation and Access to the Program For tax year 2007, Texas ranked first in the nation in the number of EITC dollars that taxpayers claimed.20.9 percent of federal income tax filers receive the EITC – higher than the U.S. average of 15.6 percent. Texas ranks last among the 50 states and U.S. territories in processing food stamp applications. To date, none of the counties in Texas are in compliance with the federal 30-day turnaround for application processing. Read HHSC’s March 23rd presentation to the  House Committee on Human Services.
State-mandated Outreach H.B. 2360, passed in the Texas Legislature in 2009, requires all employers to notify employees about EITC sites in their area. There is no state requirement for outreach or collaboration with for-profit/non-profit entities.
Economic Activity Each dollar of EITC generates $1.58 in local economic activity. Each dollar of SNAP generates $1.84 in local economic activity.
Application Difficulty
and Barriers
To file, applicants can fill out a one-page Schedule EIC form with one-page explanation. If
the 1040EZ form is used, EITC is calculated within that form.

No fingerprinting required.

No interview required to receive benefits.

To file, applicants fill out
a 22-page application.

Texas requires fingerprinting required (one of three states)

In-person interview required for most applications (not required by all states).

Persons convicted of a drug felony on or after August 22, 1996 are prevented from receiving benefits.

As more Central Texans have to cope with low wages or unemployment, it is urgent that Texas optimize its administration of both of these important safety nets.

We’d love to hear why you think EITC has more success in Texas than SNAP and for you to share your experience with us.

How to help:

Celebrate Tax Day with a call to action.  Tell your elected officials to make hunger issues a priority. Customize your letter with facts above, and facts about hunger in Central Texas.


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